E2 Poll Wrap-Up: New Payments in Your Plans

For centuries, business has built its attitude about payment on the wisdom of Pink Floyd:

Money, it's a gas Grab that cash with both hands And make a stash

-- "Money," Roger Waters, 1995

Now, however, companies worldwide are looking to make it safer and easier for customers to pay for goods and services. The race to ease started with personal checks and bank drafts, and today we're seeing a veritable explosion in new ways of transferring value from one entity to another. The question for many companies is which of those new ways they're going to accept.

That's the precise question we asked our readers in the most recent Enterprise Efficiency poll, New Payments in Your Plans. The answers indicate that there are new payment options coming for a number of companies and their customers -- and the payment options aren't necessarily what the largest banks are promoting.

The two most popular options planned for new acceptance bypass many of the trappings of traditional financial services organizations entirely. PayPal was the most common response in the survey, with over 43 percent of those answering indicating it's in their company's plans, with Square-based or smartphone payments just behind, with 42 percent. It's hard to know whether this indicates an unhappiness of merchants with the fees charged by financial organizations for process credit cards or a rise in the number of "un-banked" consumers who want to use something other than cash for their retail transactions.

In the comments to the poll, there were hints regarding the surprisingly small number who indicated that chip-and-PIN cards were on their enterprise "to-do" list. E2 blogger Joe Stanganelli pointed out that, "...contrary to popular belief, EMV is *not* inherently more secure than standard magnetic stripe cards..." That was echoed by E2 community member batye, who pointed out that based on his training and experience, "...EMV offer new ways to exploit... by hackers/skimmers..."

There's also a question about whether some of the lower-ranking responses are already in broad acceptance by most companies. (Hello, cash, at 32 percent.) Regardless of specific reasons, though, it's obvious that the options for payment are increasing -- and both merchants and consumers will benefit. Let us know which of these options you think will bring the most opportunity -- and which, from a consumer perspective, you're looking forward to using (or are planning to keep far, far from your wallet.)

Which of the following are you likely to begin accepting as payment in the next 12 months? (Choose all that apply.)

@Curt: Soon the kids down the block will need to start using it to sell their lemonade. I was mortified the other day when I passed them while walking my dogs. I have become so much a non-cash person I didn't even have 50 cents on me to buy a lemonade from them!

@Sara, I think that retailers are getting fantastic value for the money. Compared to the cost of leasing a traditional credit card POS device and maintaining a merchant account, the Square (or its direct competitors) are a true bargain until you're doing many thousands of dollars worth of transactions each month.

For Carol and other artists I know, it's perfect. And I think that the combination of Square and the locavore movement will absolutely revolutionize farmer's markets.

@Susan, for me the most interesting thing about Square is the question of just how large an organization will embrace them. It's been obvious that sole proprietors would use the little devices, but we are seeing alrger companies (like your cab examples) and larger service companies equipping drivers with Squares for their smart phones.

How long will it be before individuals really are whipping out the Square so they can take their friend's credit cards to pay them back for gas, chips, or that lunch for which money was borrowed and cash never seems to be found?

I love Square! My only complaint is that I've found that the device isn't quite as hardy as I'd like it to be.... I was recently working at a very busy merch table at a theater. We accepted payments with Square, but it only worked about half the time -- the rest of the time, instead of swiping, we had to hand-type the card information into the phone. It was quite annoying.

@Curt Great point: "I think the real reasons banks like these are that they aren't regulated as credit cards, so there's more latitude in the fee structure." I don't think that's cynicism. I think it's true. Do you think that retailers are getting ripped off, though? Or do you think that the service is worth the money?

I agree to that constraint for the government, but it is adversely effecting the Free Lance business in the country. Many people won't get the access to the Paypal money extraction process, for people who know how to, the government wont let them

@Curt: Square has also been a boon to private taxi companies. I also am impressed at how the service provider is maximizing the customer experience. I have used Square to pay at small businesses in the SF Bay Area. On a recent trip to Austin, when I used my credit card to pay for a cab ride, the driver used Square to process the payment on his smartphone. When he ran my card thru the reader, my email address popped up automatically and I was able to have the receipt easily emailed to me. Quite impressive, and a little scary at the same time.

@CMTucker, I think it's fascinating to see the extent to which Square and similar devices are changing the way business is done at farmer's markets and art fairs. I can't imagine having a booth without having Square -- and it helps when it comes to splitting up big checks at restaurants when everyone has plastic, too! Just put the bill on one card, then everyone pays that person back through Square -- it could he the end of dinner party arguments!

@Joe, the banks are pushing the technology as a security upgrade, though we've heard in comments to oth posts that the security angle is over-rated. I think the real reasons banks like these are that they aren't regulated as credit cards, so there's more latitude in the fee structure. Of course, that could just be my cynicism coming through...

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